Will enforcement authorities seize the HOTEL ROYAL PLAZA's BENAMI investment?

 Bharat Jeetega, Corruption Meetega!

PUBLIC INVESTIGATION

EXPOSE ON INDIA'S MAJOR HAWALA RACKET

Key players: #NandKishoreChaturvedi and #AshokMittal (Note: All facts and documents are public and submitted in court. (The purpose of this article is to create public awareness and not target any individual.)

 Will enforcement authorities seize the HOTEL ROYAL PLAZA's BENAMI investment?

By Michael Jordan

Following the discovery that one of the minority promoters had invested contaminated money in the hotel through a Malaysian benami business, the enforcement authorities may pursue legal action to seize the hotel's assets. According to an investigation by the #IncomeTax and #EnforcementDirectorate (ED), in 2004, #AshokMittal, a minority shareholder in the hotel, worked with #NandKishoreChaturvedi, the most wanted hawala dealer in India, to generate money from their illicit activities. They then transferred the money to Switzerland, where it was subsequently invested in order to acquire a preferential share and take control of the hotel's management and operations. Foreign direct investment (FDI) was used to accomplish this. https://www.indiatoday.in/india/story/income-tax-dept-raids-hawala-operator-nandkishore-chaturvedi-entities-several-states-2390183-2023-06-08

In 2022, Ashok Mittal's businesses and properties, including the hotel Royal Plaza on Ashok Road, were raided by income tax authorities following the revelation. The department issued a Look Out Circular (LOC) against him because they were afraid, he would disappear like Chaturvedi. https://www.outlookindia.com/business-spotlight/delhi-high-court-upholds-loc-black-money-launderer-ashok-mittal-of-hotel-royal-plaza-by-abhinav-sharma-news-334756. The dispute has produced documentation of their combined business interests in Hillcrest, a foreign company that was exploited in flagrant violation of tax laws to bring tainted money through the foreign direct investment (FDI) route and take control of the hotel's operations and management. It was also employed as a tax-evasion and money-laundering scheme. https://legal.economictimes.indiatimes.com/news/litigation/dispute-over-control-of-hotel-royal-plaza-in-delhi-reaches-nclt/105328677

Ashok Mittal's benami company, Hillcrest, a major investor in the hotel Royal Plaza, Delhi, is desperately trying to save his illegal investments after coming under the scanner of Income Tax authorities. The probe has revealed that Hillcrest has transferred their entire stake to a Sharjah-based company soon after IT conducted raids at Ashok's business premises, including the hotel, in July 2022.

The paper trail of Hillcrest reveals that there have been a series of serious tax violations in setting up the company and re-routing the money as a legitimate foreign direct investment (FDI) to control valuable prime five-star hotel properties in Delhi. The money was first parked in Switzerland, then moved to Malaysia, then back to Switzerland, and finally to Sharjah (UAE).

THE ORIGIN

Step 1: Cardiff Limited (Switzerland)

Cardiff Limited was a shell company that was registered as a Labuan company on February 26, 2003, with its head office located in Labuan, Malaysia, and Company No. LL03634. With the help of the Portcullis Group, the business was registered on February 26, 2003, with an authorised capital of US$ 12,000, consisting of 12,000 shares of US$1, or Rs. 50 in 2003 and Rs. 84 in 2023, respectively. However, the issued share capital of the company was just 1 share of US$1. Cardiff Limited has Portcullis TrustNet (Labuan) Ltd. as its sole stakeholder, holding one share valued at US$1 (equivalent to Rs. 50 in 2003 and Rs. 84 in 2023 alone). Additionally, on the day of its incorporation, Ashok Mittal and a Portcullis entity known as Portcullis Trust (Labuan) Sdn. Bhd. signed a service agreement dated February 26, 2003. By virtue of this agreement, Cardiff Limited was staffed with puppet directors and a secretary who would follow the directives of Ben Locknat Daby Seesaram, Ashok Mittal's front man.

 b) Cardiff Limited was established in accordance with the Malaysian Offshore Companies Act, 1990. An offshore business was required to have a resident director and a resident secretary in accordance with the aforementioned Malaysian statute. A domestic Malaysian company that is 100% owned by a trust company is qualified to hold the positions of secretary and director, in accordance with Sections 87 and 93 of the aforementioned Act. Taking advantage of this, on February 26, 2003, when Cardiff Limited was incorporated, two dubious domestic Malaysian private companies—Gurker Sdn Bhd and Sherper Sdn Bhd—that were fully owned by a trust company of the Portcullis Group were installed as resident directors and resident secretaries, respectively.

As will be discussed in more depth below, Cardiff Limited purchased a 100% stake in Hillcrest Realty SDN BHD in March 2003, which was at the time another shell company with Ashok Mittal's backend control. This was done shortly after the company was incorporated. Ashok Mittal's proceeds of crime were transferred through Cardiff Limited in April/June 2003 from Vikram Mittal to its wholly owned subsidiary Hillcrest Realty SDN BHD, shortly after the company's incorporation on February 26, 2003, and shortly after Cardiff Limited had acquired 100% shareholding (i.e., 2 shares of RM 1 each, equal to Rs. 23/- in 2003 and Rs. 38/- INR in 2023) of Hillcrest Realty SDN BHD in March 2003. The majority of the revenues were distributed in April 2003, which coincided with Ashok Mittal's appointment as director of Cardiff Limited. This move was presumably made to further ensure Ashok Mittal's beneficial ownership of the funds transferred through Cardiff Limited.

 It is likely that Ashok Mittal desired to have direct control over the operations when Vikram Mittal's third batch of funds—which came from an unidentified source—went through Cardiff Limited. e) Vikram Mittal provided the cash for Hotel Queen Road Pvt. Ltd., 28,292,290 (23,65,000 + 4,64,290), 8.5% Redeemable Preference, through the Ashok Mittal-controlled shell companies Cardiff Limited and its fully owned subsidiary Hillcrest Page 20 of 25 Realty SDN BHD. In the name of Hillcrest Realty SDN BHD, 100-rupee shares were issued in two lots: 23,65,000 preference shares valued at Rs. 100 each, totaling Rs. 23,65,00,000 on May 5, 2003, and 4,64,290 preference shares valued at Rs. 100 each, totaling Rs. 4,64,29,000 on July 19, 2003. f) The people who are complaining say that between April and June 2003, illegal money from crimes was sent through Cardiff Limited. This happened after letters from Vikram Mittal on April 16, 2007, telling Cardiff Limited to remove his name from the book of accounts and replace it with Bamberg Management Inc. This was done so that information could be shared with others while the money stayed in the names of Vikram Mittal and Ashok Mittal in a secret way. These actions seem to have been taken to hide Ashok Mittal's and his son Vikram Mittal's criminal histories. g) With respect, it is clarified that, despite the fact that the complainant, Mr. Ram Parshotam Mittal, is listed as a principal on Service Page 21 of the 25 Agreement dated February 26, 2003, alongside Ashok Mittal, and that, as of February 26, 2003, he is listed as a director of Cardiff Limited, also with Ashok Mittal, the complainant was neither directly involved in nor aware of the true criminal nature of this entity. After persuading him that these were plans to secure foreign investments in M/s Hotel Queen Road Pvt. Ltd., Ashok Mittal coerced Mr. Ram Parshotam Mittal into signing documents. Mr. Mittal, who trusted his younger brother, had no reason to suspect that there was any criminal intent involved. Subsequent developments also support the claim that the complainant, Mr. Ram Parshotam Mittal, was merely concerned with paper matters.

Step 2: Hillcrest Reality (Malaysia)

Subtly owned and managed by Ashok Mittal, Hillcrest Realty SDN BHD was created as another shell company. According to pre-planning, it was incorporated barely a few months before Cardiff Limited, the other shell company previously mentioned, was incorporated. However, by February or March 2003, it had become a full subsidiary of Cardiff Limited, just in time for the beginning of the money laundering process in April 2003. Its main goal was to appear in Ashok Mittal's eyes as the holder of 25 28,292,290, 8.5% Redeemable Preference Shares, each worth Rs. 100. Mittal owned and managed the company. So, after Vikram Mittal gave the money from the crime to M/S Hotel Queen Road Pvt. Ltd., 28,292,290 8.5% redeemable preference shares worth 100 rupees each were given to Hillcrest Realty SDN BHD in two groups. These shares had a value of Rs. 28,29,29,000/-. The first lot consisted of 23,65,000 preference shares of Rs. 100/- each, which added up to a value of Rs. 23,65,00,000/- on May 5, 2003, and the second lot consisted of 4,64,290 preference shares of Rs. 100/- each, which added up to a value of Rs. 4,64,29,000 on July 19, 2003. The information that follows contains further particulars about Hillcrest Realty SDN BHD. Over the course of almost two months, all of these illicit transactions were finished one after the other. b) On November 22, 2002, Hillcrest Realty SDN BHD was first incorporated with the intention of operating as an investment company. The complainants learned from a number of documents that Hillcrest Realty SDN BHD was incorporated with a share capital of RM 100,000, which was made up of 100,000 shares with a face value of RM 1. But two Malaysian citizens, George Pathmanathan A/L Michael Gandhi Nathan and Francisca Wong Chi Hiong, who were also the company's first directors, only owned two issued shares, valued at roughly Rs. 23 in 2003 and Rs. 38 in 2023 (see Page 23 of 25 2023) The total issued capital of the aforementioned company was only RM 2. Also disclosed in the ICIJ Offshore Links database as a director of Portcullis TrustNet (Labuan) Limited is George Pathmanathan, A/L Michael Gandhi Nathan. A copy of the Hillcrest Realty SDN BHD paperwork that reveals its share capital and shareholders. Ben Locknat Daby Seesaram, the spokesperson for Ashok Mittal (the authorised representative for Cardiff Limited), was named to the Hillcrest Realty SDN BHD board of directors on or about February 20, 2003. c) The fact that the initial shareholders and directors were merely temporary name lenders or puppets of Ashok Mittal performing their pre-arranged roles is apparent from the fact that, within two months of Hillcrest Realty SDN BHD's incorporation, they transferred their two shares to Cardiff Limited for a total of RM 2, which is equivalent to approximately Rs. 23/- in 2003 and Rs. 38/- in 2023. This was done shortly after the latter company, Page 24 of 25, was incorporated on February 26, 2003. It decided to buy all two shares of RM2 each, which is the same as INR23/- in 2003 and INR38/- in 2023, from the original shareholders, George Pathmanathan A/L Michael Gandhi Nathan and Francisca Wong Chi Hiong. The aforementioned resolution also gave George Pathmanathan A/L Michael Gandhi Nathan, a director and selling shareholder of Hillcrest Realty SDN BHD, permission to represent Cardiff Limited at all general meetings of Hillcrest Realty SDN BHD, demonstrating the parties' close relationship and preplanning once more. The selling shareholders, George Pathmanathan A/L Michael Gandhi Nathan and Francisca Wong Chi Hiong, who are also directors of Hillcrest Realty SDN BHD, passed a resolution to sell the shares to Cardiff Limited on the same day as the Cardiff resolution, which was March 17, 2003. The three directors—Ben Locknat Daby Seesaram being the third—sign this resolution, together with the two previously mentioned directors. d) As previously explained, the illegal transfer of proceeds of crime occurred in April/June 2003, immediately following Hillcrest Realty SDN BHD.'s acquisition by Cardiff Limited as its wholly owned Page 25 of 25 subsidiary in March 2003. This allowed for the purchase of 28,292,290, 8.5% redeemable preference shares of Rs. 100 each, with an aggregate INR value of Rs. 28,29,29,000/- in the name of Hillcrest Realty SDN BHD, which Ashok Mittal owned and controlled at the backend.

 Step 3: Bamberg Management Inc.'s (Switzerland)

As previously mentioned in the part preceding this one regarding Cardiff Limited, the illicit transfer of illicit proceeds occurred between April and June 2003. After that, on April 16, 2007, Vikram Mittal wrote to Cardiff Limited c/o Portcullis, instructing them to change his name in the book of accounts to Bamberg Management Inc.'s so that the money could be shared with outside parties while remaining confidential.

Step 4: Aravali Trading LLC (Sharjah)

Afterwards, on November 23, 2022, Bamberg Management Inc. moved the full shareholding—two shares at RM1 each—to an organisation called Aravali Trading LLC, which was established in Sharjah, United Arab Emirates, in an effort to further hide the criminal trails. It's also significant to note that this transfer occurred on November 23, 2022, immediately after the income tax raid in July 2022.

 KEYWORDS: #AshokMittal, #AshokKumarMittal, #AshokMittalHotelRoyalPlaza, #RoyalPlazaDelhi, #HotelRoyalPlazaDelhi, #NandKishoreChaturvedi, #PushpakBillion, #BlackMoney, #Hawala, #Hillcrest, #NCLT, #IncomeTax, #EnforcementDirectorate, #IT, ITraids, ITraidhotelplaza, #proceedofcrime, #pmla, #uddhavthackeray, #moneylaundring, #indimostwantedhawaladealer